FRANKFURT - COMMERCIAL banks deposited slightly less money at the European Central Bank figures showed on Wednesday, but the amount remained over 200 billion euros (S$400 billion), despite recent changes designed to make the practice less appealing.

Banks deposited 200.855 billion euros overnight at the ECB as of Jan 27, down from the 205.154 billion euros reported on Tuesday, but well above levels when money markets are functioning efficiently.

The ECB also said that 1.469 billion euros had been borrowed by banks from its overnight loan facility, down a fraction from the 1.480 billion euros taken previously.

The enormous amounts being deposited by banks is likely to disappoint the ECB.

Last week it introduced changes which it hoped would make depositing cash at the ECB less attractive and encourage banks back into interbank lending.

It re-widened to gap between its main interest rate, now 2 percent, and its overnight borrowing and deposit rates. The overnight lending rate remained at 3.0 per cent but the deposit rate dropped by 100 basis points to 1.0 per cent. -- THOMSON REUTERS